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  • - A radical idea to get a high-renewable electric grid

    This is an interesting approach to optaining very high penetration of renewables such as photovoltaics and wind.  At present most large installations operate under Power Purchase Agreements (PPA) wherein the economics are based on a sell all output at predetermined prices. This contrasts with standalone systems wherein the system size Read More
  • - Breakthrough Batteries Powering the Era of Clean Electrification

    - Breakthrough Batteries Powering the Era of Clean Electrification Battery Storage Costs Drop Dramatically, Making Way to a New Era. A recent Rocky Mountain Institute (RMI) report continues to confirm that clean electrification through batteries is advancing at impressive rates. Very interesting report: Breakthrough Batteries- Powering the Era of Clean Electrification Read More
  • - Interesting Technology

    An assortment of links to interesting information   Semiconductor Nanowires Could Double the Efficiency of Silicon Solar Cells A p/n semiconductor junction is not the only way of converting sunshine into useful electrical energy.  Light consists of a flow of photons of various energy levels (colors).  See this article-Solar Cells.  Nanowires Read More
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The federal government has incentives for homeowners to switch to solar through the solar investment tax credit (ITC), also known as the federal solar tax credit. This credit now lets homeowners claim 30% of their total solar system installation costs as a deduction on their federal taxes.

The ITC will decrease to 26% in 2033 and drop to 22% in 2034. It will end in 2035 unless Congress renews it.

The ITC is not a tax deduction. Instead, it reduces what you owe in taxes.  This credit applies to the costs associated with installing a solar photovoltaic (PV) system in that tax year. There is no maximum amount that you can claim from your solar project, however as a practical matter your utility may impose limits on the amount of energy you may backfeed to the utility.

You can claim the federal solar tax credit as long as you are a U.S. homeowner and own your solar panel system. You can claim the credit once; it will roll over to the next year if the taxes you owe are less than the credit you earn. Keep in mind that the credit is a deduction, not a refund.

For example, if you install a solar panel system for $19,000, you’ll owe $5,700 less on your federal tax return. If your tax liability is less than $5,700, the remainder of the credit will roll over and be applied to your federal income taxes the following year.

You claim the solar tax incentive as part of your annual federal tax return with the Internal Revenue Service (IRS). Your solar provider should supply the proper documentation and instructions upon your demand. We have listed the essential steps in claiming the credit here:

  • First, download IRS Form 5695 as part of your tax return.
  • Then, on Part I of the tax form, calculate the credit. You file your solar system as “qualified solar electric property costs.” Then, on line 1, enter your project’s total costs as written in your solar contract.
  • Complete the calculations on lines 6a and 6b.
  • On line 14, calculate any tax liability limitations using the IRS’s Residential Energy Efficient Property Credit Limit Worksheet.
    Finally, complete the calculations on lines 15 and 16. Be sure to enter the exact figure from line 15 on your Schedule 3 (Form 1040), line 5.
  • We recommend that taxpayers consult a tax expert and your solar provider to ensure you are correctly claiming the ITC.

The Office of Energy Efficiency & Renewable Energy (EERE) states the following criteria determines whether you can qualify to claim the federal solar tax credit:

  • Date of installation: You installed your solar system between Jan. 1, 2006, and Dec. 31, 2034.
  • Original installation: The solar PV system is new. The credit can be claimed only on the original installation of solar equipment and not the repurposing or reuse of an existing system.
  • Location: The solar system is located at your primary residence or secondary home in the United States. It may also be used for an off-site community project if the electricity generated is credited against your home’s electricity consumption and does not exceed it.
  • Ownership: You own the solar PV system. You cannot claim the credit if you are leasing or in an agreement to purchase electricity generated by the system, including a solar power purchase agreement (PPA).

According to the EERE, the federal solar tax credit covers the following items:

  • Panels: The credit covers solar PV panels or PV solar cells.
  • Additional equipment: The credit covers other solar system components, including the balance-of-system equipment and wiring, inverters and other mounting equipment.
  • Batteries: The ITC covers storage devices, such as solar batteries, charged exclusively by your solar PV panels. It also covers storage devices activated in a subsequent tax year to when the solar energy system is installed. Beginning on Jan. 1, 2023, stand-alone energy storage that doesn’t charge solar panels exclusively will qualify for the ITC credit.
  • Labor: Labor costs for on-site preparation, assembly or original solar installation are covered. This includes permitting fees, inspection costs and developer fees.
  • Sales tax: The credit also covers sales taxes applied to these eligible expenses.

The federal solar tax credit makes switching to solar a cost-effective and worthwhile investment. We suggest you contact a tax professional for tax advice, as well as the IRS and your solar provider to claim the Solar ITC.

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  • Welcome to the Arizona Solar Center

     This is your source for solar and renewable energy information in Arizona. Explore various technologies, including photovoltaics, solar water heating, solar architecture, solar cooking and wind power. Keep up to date on the latest industry news. Follow relevant lectures, expositions and tours. Whether you are a homeowner looking to become more energy efficient, a student learning the science behind the technologies or an industry professional, you will find valuable information here.
  • About The Arizona Solar Center

    About The Arizona Solar Center Arizona Solar Center Mission- The mission of the Arizona Solar Center is to enhance the utilization of renewable energy, educate Arizona's residents on solar technology developments, support commerce and industry in the development of solar and other sustainable technologies and coordinate these efforts throughout the state of Arizona. About the Arizona Solar Center- The Arizona Solar Center (AzSC) provides a broad-based understanding of solar energy, especially as it pertains to Arizona. Registered Read More
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